It was the highest reading in more than 10 years, NAR reports. Only the Midwest saw a dip in contract activity.

What’s more, the index increased 1.4% compared with July 2015.

A sizable jump in the West lifted pending home sales higher.

“Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas,” said Lawrence Yun, chief economist for NAR, in a release. “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”

Yun added that the increase in the West was the highest in over three years, largely because of stronger labor market conditions.

Yun said the key to accelerating home sales is for home builders to start building smaller homes that are more affordable. He said recent data shows that home builders are already starting to move in this direction.

“Realtors in several high-cost areas have been saying for quite a while that there is robust demand for single-family starter homes and townhomes at an affordable price point for young buyers,” Yun said. “The homeownership rate won’t move up from its over-50-year low without a meaningful boost from first-time buyers, whose participation has yet to noticeably increase so far this year despite mortgage rates near all-time lows.”

Currently, NAR is forecasting that existing-home sales this year will reach 5.38 million, a 2.8% increase from 2015 and the highest annual pace since 2006, when they reached 6.48 million.

However, NAR is also forecasting that home prices will rise 4% this year, which raises questions about affordability. U.S. home prices increased about 6.8% in 2015, according to NAR’s data.